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Auto-enrolment and existing pension schemes

Ian Luck: "The first thing to do is to look at the existing scheme. Is it going to be appropriate for your needs as an employer post auto-enrolment, just because you have a scheme. That’s the first thing, that’s a good thing because it means that you’ve actually been at least rewarding staff in the past through the use of a pension arrangement. But is that scheme going to be appropriate for the wider employee numbers that you have once you need to auto enrol them? It’s easy to look towards your existing scheme as being the end profit, the end use. But that may not be appropriate. By introducing a whole range of workforce who didn’t want to be in the pension plan in the first place, you might actually end up watering down the quality of the scheme that you already have in place. It is very much a horses for courses. And whilst your existing scheme might be appropriate, if you’ve got a large number of your employees already in it, if you’ve got a vast number of your employees who are not engaged in the pension process then that will need a different response altogether. There are a number of alternatives out there as you’d imagine. But...and part of the problem or part of the help that we can give is to actually source the right response for the right company, whether that be Nest or one of the other alternatives or one of the more traditional pension providers."

Auto-enrolment and existing pension schemes

Ian Luck: "The first thing to do is to look at the existing scheme. Is it going to be appropriate for your needs as an employer post auto-enrolment, just because you have a scheme. That’s the first thing, that’s a good thing because it means that you’ve actually been at least rewarding staff in the past through the use of a pension arrangement. But is that scheme going to be appropriate for the wider employee numbers that you have once you need to auto enrol them? It’s easy to look towards your existing scheme as being the end profit, the end use. But that may not be appropriate. By introducing a whole range of workforce who didn’t want to be in the pension plan in the first place, you might actually end up watering down the quality of the scheme that you already have in place. It is very much a horses for courses. And whilst your existing scheme might be appropriate, if you’ve got a large number of your employees already in it, if you’ve got a vast number of your employees who are not engaged in the pension process then that will need a different response altogether. There are a number of alternatives out there as you’d imagine. But...and part of the problem or part of the help that we can give is to actually source the right response for the right company, whether that be Nest or one of the other alternatives or one of the more traditional pension providers."

Strategy development for investment was what Envestors was created to teach. Founding Director Oliver Woolley discusses the importance of preparing for investment in this TV show.

Investment strategy development

One of the reasons we set up Envestors is that we thought there was a bit of education needed on both the investor and entrepreneur side. So we provide training for investors. We produce a guide to how to invest as a business angel and we do a seminars for investors. So our idea is to educate both the investor and the entrepreneur and try and get them close enough so that we can get good deals done.
So we find that a lot of companies aren't particularly well prepared so we run an investment readiness briefing on a Tuesday morning every two weeks, which is free. It is essentially a two hour seminar about the practicalities and realities and the obligations of raising external equity finance. We find that at the end of that, that the company has though a lot about their business plan but they haven't though enough about it from an investment perspective. So we will then work with a company to make sure that there is a full and detailed investment proposal.

Investors look for businesses with good governance

Good governance in a company will appeal to investors, who want to know their investment will be secure, as Oliver Woolley discusses in this TV show.

Investors and good governance

One of the main criteria for finding a successful investment is normally down to the quality of their management team, and you’ll get a lot of investors that will say the three most important things are management, management and management. And certainly we’ve had some very successful businesses, which are still yet to exit, but it’s usually because they’ve got a very, very good strong dynamic experienced CEO, as well as a complete Board and a Board that’s adding value and can help steer the business through to exit.

Keep browsing shows on Inside Finance TV for more expert discussion on business investment and good governance.

Artificial intelligence and cognitive computing is the latest in a series of technological developments that have affected the value of human ability. Graeme Codrington discusses the development in this video.

Computers have the advantage

About 100 years ago if you wanted to be quite successful in the world it would have been very clever for you to be quite physically fit. Because in the industrial age, as before that in the agrarian age, in the age of farming the people who either owned the land or owned the factories or worked on the land or worked in the factories, they were the people who were in charge. Those were your assets, physical ability. What we’ve done over the last 100 years is replaced peoples’ physical, the physical needs in terms of what we need from them physically with machines, you know, the combined harvester and the container and the robots in factories. And then for the last 50 years we have ploughed our resources, as human beings we’ve become clever by being clever. We have moved into the information age where your mental ability is what sets you apart from other people. Now, somebody who was gifted at birth, not by my choice, but was gifted with a reasonable intelligence and a nice IQ and a middle class family that could get me through university, that’s been brilliant.
Because I’ve been able to use my brain to make money, but unfortunately right now computers are about to do to me what robots and machines did to my farm working, factory working uncles and grandparents. They’re about to make me redundant because they can think faster than I can. They can think more than I can. They don’t need to take a break to eat or sleep or all the other things I like to do.
Inside Finance TV has more fantastic video by Graeme Codrington and other experts on the future of business.

Business strategy models have to adaptable to future disruptions and developments. In this TV show Keith Coats of TomorrowToday discusses strategic thinking for leaders.

Business strategy models in an unpredictable world

Leaders have to be future-focused. Levi right now have a great slogan, which says ‘the future has left, so go forth’. Jim Data is a retired futurist and he articulated that past thinking amongst futurists was something like this … I might have some of the percentages slightly wrong but the rough ratios is 80% of our tomorrows would be built on what futurists call continuations, so if you want to understand tomorrow, look at the DNA of today, 80%. 15% would be cycles – economic, political social cycles – and 5% would be novelties. Now, in the futurist language a novelty is the curve ball, the unexpected, the 9/11, the thing that very few people could foresee. I’ll preface that with past thinking. Current thinking amongst futurists has inverted that table, turned it on its head. They are telling us that up to 80% of our tomorrow is what they call novelty, we simply do not know. Now, even if they’re half correct I wouldn’t go to war over those percentages, it’s the trend here we’re looking at, that the bulk of our tomorrows is going to be a surprise, going to be the unexpected, the unpredictable. The question then becomes how do you build continuity in that? What does the organisation that learns how to build planes in the air, as it were, look like in that context? For one thing it renders redundant strategic planning, you cannot plan your way into that kind of uncertainty. We need companies today who understand the emphasis needs to be on strategic thinking and at all levels of the organisation, this is a leadership agenda.

Inside Finance is very interested in business strategy models and the future business world. Browse our video player for related content.

Corporate governance issues arising from boardroom structure includes how much each member should be paid for what they are expected to do, as Rob Wirszycz discusses in this TV show.

Corporate governance issues - Defining roles

Remuneration is a really sticky area in a sense. Actually, if I’m a Non-Executive Director I don’t expect to own any shares. My belief is that a Non-Executive Director is there to be completely objective. And I’ve been in many Board meetings where effectively the Board meeting is a meeting of the shareholders. Self-interest always wins in those meetings. So if I’m a Non-Executive Director in a meeting and I’m there, my job, I’ll accept a retain, a relatively small retainer, depending on what they want me to do. If they do anything away, outside of the brief, my belief is that that should be paid for separately. But so just to be a Non-Executive Director, I would like to be paid for the very clear, clearly-defined, but I don’t want, expect any shares. As a Chairman it’s different. Now the Chairman, I’m acting on behalf of the shareholders, so I actually have to have alignment with them, so what I always ask for when I’m Chairman is again a retainer, which is a small amount of money, relatively small amount of money, but I want to be able to earn shares based on the achievement of the plan. So if we achieve the plan, which I’m owning, then I believe that I should be aligned with the shareholders’ interests and I should be able to earn in shares into the business.

Following your entrepreneurial spirit

Entrepreneurial spirit cannot be taught. There comes a point when you need to stop moaning and start doing things your way. In this video Simon La Fosse explains why he became an entrepreneur.

Entrepreneurial spirit finds a better way to do business

I was getting a bit bored actually. I think partly boredom, partly you I kind of felt I’d reached a certain part, a time in my life when I was, I had enough evidence about working in a certain way being a really effective way to work and a pleasurable way to work and I’d seen too many organisations that I’d worked for just, I’m not saying it, it sounds a little bit arrogant but not quite seeming to get that. And so there comes a point where you’ve got to stop whinging and you’ve got to put your money where your mouth is and say “Actually, I think there’s a better way to do business and that’s what we’re going to stand for as a firm” and that was, I took a gulp, remortgaged the house, as far as the bank was concerned to build an extension, which is yet to be built, and took the dive.

Inside Finance will continue to bring you inspirational success stories from those with entrepreneurial spirit.

Business communication about director pay is important

Business communication between company leaders, shareholders and the workforce explaining the reasoning of a director's pay could help satisfy everyone. Caroline Newsholme explains further in this TV show.

Business communication is vital

A lot of shareholders probably feel dissatisfied and feel that director’s remuneration is more and more out of kilter, in some instances, with reality. When you look at what some directors are being paid it does feel a very long way from the average wage of a shareholder or a member of the workforce of that particular organisation, so there is bound to be increasing focus on what directors are being paid and how they are being rewarded. I think people just want to understand that they’re worth it and that it is justified.

Informed financial planning: Structuring tax efficient investments

Informed financial planning is essential when it comes to investments. Investment managers should be well informed of tax rules so that no errors are made. Michael Pagliari explains further in this business TV show.

Informed financial planning and investments

There are different categories of planning, so for resident domicile UK clients the principles are pretty well-established, there are certain types of securities that should and can sit perfectly well in portfolios and there are other types of securities that shouldn’t. So, to give an example, there are some tax efficiencies through using fixed income securities which trade at which trade at discounts, there’s advantages in using OECs but there are some other instruments which effectively take a capital gains tax charge and transform it into an income tax charge at, you know, a much higher rate. And then if you move on to the sort of res non-dom world, that’s a very sort of … a much more complicated area with much more potential for error. So for example it’s very important that income and capital are separated, managed in separate buckets; if those are mixed there can be very severe tax consequences. So it’s really basic housekeeping-type issues but extremely important that the investment manager has a good handle on them. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer.

Dynamic boards are now using expertise form generation y to inform their business development. In this TV show Peter Klauber discusses this change.

Modern thinking in dynamic boards

I think Y generation has a lot to answer for. I think it is fantastic. Ideas come from everywhere in an organisation not just the board. I think most switched on companies will enable everyone to add some opinion to the process of business development. We now have very dynamic boards with all ages, looking for expertise to help and there's no fear in using it.

Ensuring boards make good strategy development decisions

Business strategy development is the job of the board. In this TV show Rob Wirszycz discusses how they can get these decisions right.

Deciding on strategy development

Boards, I believe, are where decisions are made. And, you know, while you want the Chief Executive and their team to make other decisions, you know, ask forgiveness rather than permission sometimes, but the decisions are in my view, what I call an irrevocable allocation of resources. So, if we make a decision at a Board, we don’t go back and relitigate, unless the facts materially change. I mean I think there’s a quote from John Maynard-Kings, who sort of said, you know, “when the facts change I change my opinion” and that’s the truth, you know, you shouldn’t hold on to something when the facts are materially different. But the Board makes those irrevocable decisions, they write them down, everybody has to agree, so you can’t come out of a Board meeting saying “Well, I know they said that then but I’m doing this”. Decisions are really important in Boards, and that’s the role of the Non-Executives, be they Directors or Chairmen, is to ensure that the decision is taken in a proper context and it’s not because “We would think that way because we’re all in our 40s and 50s and male”.